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Iqiyi Inc (IQ)
NASDAQ:IQ
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Iqiyi
(NASDAQ:IQ)
Rating:59Neutral
Price Target:
$2.00
▲( 19.76% Upside)
Positive Factors
Content Strategy
The company is making strategic efforts to diversify its content mix through micro-dramas and premium titles, showing early signs of positive progress.
Monetization
Reclassification of membership tiers with more refined segmentation should support healthier ARM growth.
Negative Factors
Financial Performance
Non-GAAP operating income declined by 56% YoY, indicating challenges in profitability.
Revenue
IQIYI's growth challenges remain, with the company guiding for flat revenue, implying a year-on-year decline.
Subscriber Growth
Continued year-over-year pressure on subscriber numbers is expected.
Iqiyi (IQ) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$882.62M
Dividend YieldN/A
Average Volume (3M)30.89M
Price to Earnings (P/E)39.9
Beta (1Y)1.22
Revenue Growth-10.05%
EPS Growth-85.30%
CountryUS
Employees4,673
SectorCommunication Services
Sector Strength89
IndustryEntertainment
Share Statistics
EPS (TTM)0.04
Shares Outstanding528,516,360
10 Day Avg. Volume22,521,097
30 Day Avg. Volume30,889,364
Financial Highlights & Ratios
PEG Ratio-0.06
Price to Book (P/B)0.16
Price to Sales (P/S)0.00
P/FCF Ratio1.10
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$2.13Price Target Upside27.54% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
Iqiyi Business Overview & Revenue Model
Company DescriptioniQIYI, Inc., together with its subsidiaries, provides online entertainment services under the iQIYI brand in the People's Republic of China. The company offers various products and services comprising internet video, online games, live broadcasting, online literature, animations, e-commerce, and social media platform. It operates a platform that provides a collection of internet video content, including professionally-produced content licensed from professional content providers and self-produced content. The company also provides membership, content distribution, and online advertising services. In addition, it operates iQIYI Show, a live broadcasting service that enables users to follow their favorite hosts, celebrities, and shows in real time through live broadcasting; and iQIYI Lite, an easy and quick access to the personalized videos based on their user preferences. Further, it is involved in the talent agency and IP licensing activities, as well as engages in developing a video community app. The company was formerly known as Qiyi.com, Inc. and changed its name to iQIYI, Inc. in November 2017. iQIYI, Inc. was incorporated in 2009 and is headquartered in Beijing, China. iQIYI, Inc. is a subsidiary of Baidu Holdings Limited.
How the Company Makes MoneyiQIYI generates revenue primarily through subscription services, where users pay for access to premium content. The company also earns money through advertising, with brands paying to display ads to iQIYI's large user base. Additionally, iQIYI has revenue streams from content distribution, licensing its original productions to other platforms and networks. The company also engages in partnerships with various content creators and production houses to expand its content offering and reach. Furthermore, iQIYI explores additional monetization opportunities through online gaming, live streaming, and membership services, leveraging its strong brand presence and technological capabilities.
Iqiyi Financial Statement Overview
Summary
Iqiyi shows signs of financial improvement with better profitability and operational efficiency. However, declining revenue and high debt levels remain key areas to watch. The company needs to sustain its cash flow generation and manage debt effectively to ensure long-term stability.Income Statement
Iqiyi's revenue showed a decline from 2023 to 2024, with a revenue growth rate of -8.31%. Despite this, the company improved its profitability metrics, with a gross profit margin of 24.88% and a net profit margin of 2.61% in 2024, compared to previous losses. The company's EBIT and EBITDA margins were positive, indicating operational improvements. However, the revenue decline remains a concern.70
Positive
Balance Sheet
Iqiyi's balance sheet reflects a moderate financial position. The debt-to-equity ratio of 1.06 is stable but shows reliance on debt. Return on Equity improved significantly to 5.72% in 2024, reflecting better profitability. The equity ratio stands at 29.21%, indicating a decent proportion of assets funded by equity. While there are improvements, the high debt levels could pose risks in the future.65
Positive
Cash Flow
The cash flow statement indicates a decline in free cash flow from 2023 to 2024 by 37.46%. The operating cash flow to net income ratio was 2.76, suggesting strong cash generation relative to profits. However, the free cash flow to net income ratio was 2.66, highlighting potential challenges in maintaining cash flow levels amidst revenue declines.60
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 29.23B | 31.87B | 29.00B | 30.55B | 29.71B | Gross Profit |
| 7.27B | 8.77B | 6.68B | 3.04B | 1.82B | EBIT |
| 1.81B | 2.99B | -12.81B | -4.48B | -6.04B | EBITDA |
| 1.82B | 17.25B | 14.34B | 12.10B | 11.28B | Net Income Common Stockholders |
| 764.06M | 1.93B | -117.78M | -6.11B | -7.01B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 4.47B | 5.38B | 7.92B | 4.35B | 14.27B | Total Assets |
| 45.76B | 44.59B | 46.05B | 42.47B | 48.19B | Total Debt |
| 14.14B | 15.29B | 21.83B | 17.57B | 21.52B | Net Debt |
| 10.61B | 10.86B | 14.74B | 14.57B | 10.61B | Total Liabilities |
| 32.39B | 32.41B | 39.70B | 36.80B | 38.85B | Stockholders Equity |
| 13.37B | 12.09B | 6.25B | 5.19B | 9.26B |
| Cash Flow | Free Cash Flow | |||
| 2.03B | 3.25B | -6.22B | -6.35B | -5.80B | Operating Cash Flow |
| 2.11B | 3.35B | -5.95B | -5.95B | -5.41B | Investing Cash Flow |
| -2.44B | -1.74B | 1.26B | 1.26B | 159.30M | Financing Cash Flow |
| -1.37B | -4.29B | -2.96B | -2.96B | 9.37B |
Iqiyi Technical Analysis
Negative
1.67
Price Trends
1.95
Negative
2.06
Negative
2.23
Negative
Market Momentum
-0.05
Positive
36.21
Neutral
8.11
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IQ, the sentiment is Negative. The current price of 1.67 is below the 20-day moving average (MA) of 1.87, below the 50-day MA of 1.95, and below the 200-day MA of 2.23, indicating a bearish trend. The MACD of -0.05 indicates Positive momentum. The RSI at 36.21 is Neutral, neither overbought nor oversold. The STOCH value of 8.11 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for IQ.
Iqiyi Risk Analysis
Iqiyi disclosed 96 risk factors in its most recent earnings report. Iqiyi reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 2 New Risks
1.
We may not have the ability to raise the funds necessary to settle redemption of our existing notes, or to repurchase such notes upon a fundamental change or on certain specific dates, and our future debt may contain limitations on our ability to pay cash upon conversion or to repurchase the notes. Q4, 2022
2.
The sale or availability for sale of substantial amounts of our ADSs could adversely affect their market price. Q4, 2022
Iqiyi Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $504.47B | 56.01 | 40.84% | ― | 14.11% | 47.22% | |
70 Outperform | $10.12B | ― | -4.34% | ― | 17.30% | 81.72% | |
61 Neutral | $14.08B | 5.95 | -4.18% | 3.68% | 2.79% | -36.29% | |
59 Neutral | $882.62M | 39.86 | 2.21% | ― | -10.05% | -85.30% | |
56 Neutral | $8.51B | ― | -28.56% | 1.67% | -4.50% | -898.86% | |
56 Neutral | $22.27B | ― | -27.69% | ― | -5.58% | -254.85% | |
52 Neutral | $8.51B | ― | -28.56% | 0.88% | -4.50% | -898.86% |
* Communication Services Sector Average
Performance Comparison
IQ
Iqiyi
1.67
-3.07
-64.77%
PARA
Paramount Global Class B
12.03
0.24
2.04%
NFLX
Netflix
1,185.39
536.39
82.65%
ROKU
Roku
69.01
12.56
22.25%
PARAA
Paramount Global
22.70
2.29
11.22%
WBD
Warner Bros
9.00
1.13
14.36%
Iqiyi Earnings Call Summary
Earnings Call Date:May 21, 2025
(Q1-2025)
| % Change Since: -10.22%|
Next Earnings Date:Aug 20, 2025
Earnings Call Sentiment Positive
The earnings call reflected a generally positive outlook with strong revenue growth in both overall and membership services, as well as significant expansion in the content ecosystem and international revenue. However, there are challenges in advertising revenue and increased costs, along with limitations in overseas business growth due to financial constraints.Q1-2025 Updates
Positive Updates
Sequential Revenue Growth
Total revenues for the first quarter of 2025 were RMB7.2 billion, up 9% sequentially.
Strong Performance in Membership Services
Membership services revenue increased by 7% sequentially to RMB4.4 billion, driven by the success of long-form dramas.
Content Ecosystem Expansion
iQIYI expanded its micro drama portfolio to over 15,000 titles, seeing impressive growth in daily viewing time and unique visitors, with increases over 300% and 110% respectively.
International Revenue Growth
Revenues from regions outside of Mainland China increased by over 30% year-over-year, reaching a new high in the average daily number of subscribing members.
Debt Reduction and Financial Management
The outstanding principal balance of convertible bonds declined from RMB2.9 billion in Q1 2023 to RMB1.17 billion, resulting in a 30% reduction in net interest expense year-over-year.
Negative Updates
Advertising Revenue Decline
Advertising revenue decreased by 7% sequentially to RMB1.3 billion, attributed to macroeconomic pressures and seasonality.
Increased Content and Operating Costs
Content costs rose by 10% sequentially to RMB3.8 billion due to a higher number of premium dramas, and total operating expenses increased by 8% sequentially due to higher marketing spending.
Limited Overseas Financial Resources
The overseas business has experienced rapid growth but faces limitations due to financial resource restrictions.
Company Guidance
During iQIYI's first quarter 2025 earnings call, the company reported a 9% sequential increase in total revenue, reaching RMB7.2 billion. Membership services revenue grew by 7% to RMB4.4 billion, while advertising revenue decreased by 7% to RMB1.3 billion due to macroeconomic pressures and seasonality. Content cost rose by 10% to RMB3.8 billion, reflecting the launch of more premium dramas. The company highlighted its strategic focus on enhancing its content ecosystem, particularly through long-form and micro dramas, and leveraging AI to improve user experience. They also noted the promising growth in their overseas markets, with a 30% year-over-year revenue increase, although the contribution to total revenue remains relatively low. Looking forward, iQIYI aims to continue investing in content and user acquisition to drive future growth.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.